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Transition to Critical Chain Multi-Project Management for Long Duration ProjectsWhat to Do Until Buffer Management Kicks InAbstractThe transition from traditional project management to Critical Chain Project Management (CCPM) in a multi-project environment presents a formidable problem with projects of long duration. A simple method is presented for that transition and provides the metrics necessary to directly encourage and cement the behaviors needed for Critical Chain Multi-Project Management. This paper assumes the reader is familiar with CCPM.The Multi-Project ImplementationThis paper focuses on the period of time from planning the first Critical Chain (CC) project, the cut-over project, to completion of the last traditionally managed project. This can be a long period of time before the company has fully implemented Critical Chain Project Management. Theory of Constraints (TOC) practitioners involved in Critical Chain Mulit-Project Management (CCMPM), often find this transition to be the toughest part of an implementation.The Implementation ConflictIn order to successfully implement Critical Chain Multi-Project Management, we must obtain support for it. Everyone expects that CCPM will be another flavor-of-the-month implementation that fades away if properly ignored. To obtain that support, we must start with one project to prove that CCPM works. And to be successful, we must change the whole project system to CCMPM. Because Critical Chain requires Buffer Management and traditional projects can’t use it, we must implement CC on all projects at the same time.Implement One Critical Chain Project FirstEven though we know it works, we must prove that it works “here!” A common solution is to use a pilot (trial) project as a way to demonstrate CCPM and get the bugs out of the existing system. One project at a time is much simpler to implement than many. The pilot project should not be thought of as a trial. It’s really the first Critical Chain (CC) project, the cut-over project. Every new project following it will also be a CC project.Typically, for a transition, the cut-over project is planned while the work-in-process is ignored. But in a multi-project management environment, that means that some or many shared resources will be fought over by the CC and non-CC projects. The resources are usually expected to multitask and have several projects in work at one time. Multitasking is a huge factor in projects being slow. How can scarce resources be assigned where they are most needed, if the statuses of these projects are measured differently?The common approach to adding a new project to the pipeline of projects is to commit to a date and put it in the system. With little understanding of the amount of work in the system and the system’s capacity, work is pushed in with the expectation that it will get done.With a system full of work-in-process projects, it will take a long time to complete this first CC project. Continued multitasking between projects will assure it. The reality is that people are asked to not multitask on the CC project while they are multitasking on the others. The non-CC projects will delay the faster, CC project. It will be difficult to determine and measure the Critical Chain project’s success compared to the others. Some people will believe it gets special attention and will demand to share its resources.The more difficult problem is the lack of Critical Chain buffer management. Lacking CC project buffers, traditional projects can’t use buffer management. Priorities among the projects may be determined by perceived urgency as expressed by the project managers. Implementing the first Critical Chain project has not always been easy.Big Bang ApproachThe whole project system can be changed in one massive replan of all projects. It may make a lot of sense since we know we won’t be done until all the projects are CC projects. All projects are measured the same way and they quickly get up to speed. Or do they? How does the whole system get changed? All of the projects must be re-planned and changed to CCPM by shortening the duration of many, many tasks of many projects.In a small system, the big bang approach is a real option. In a large system, it is definitely much more challenging and probably not possible. To change all the projects to be Critical Chain projects requires re-planning while they are in progress. The same people that are working the projects are need to do the replan. It’s likely to be chaotic and it won’t happen overnight. Re-planning will delay the implementation, delay current projects and may jeopardize an initial (or any) success. Just the opposite of what was intended.Delay Until the System is ReadyDo not insert the cut-over project until the resources can focus on it. Prioritize the projects. Since any prioritization is effective in increasing the speed of a system, use the commitment dates as priorities to help determine what to focus attention on. Propose a drum resource and plan the release of the cut-over project to be synchronized with this drum. That sets up the next issue. How do resources (and management) know what to work on next? We need buffer management. We still can’t have it.Unfortunately, it is not possible to start with a clean slate, no projects. We must deal with the work as it is in the system. It looks like we have to wait to use buffer management until after all projects in the system are CC projects. We still have an implementation conflict.A New ApproachCreate a method of comparing a Critical Chain project’s status with a traditionally managed project’s status, while promoting better behaviors.(1) Prioritizing the work allows us to recognize that some work may be low enough priority to be delayed or canceled. Use buffer management on the first CC project, and create a kind of virtual buffer for the other projects. Then use virtual buffer management on all of those projects without re-planning them.(2) Collect status for all projects as “How long until you are done with your task?” If percent complete is provided, accept it and restate it back as, “Does that mean you have 5 days of work remaining and you expect to be finished by next Wednesday?” Also ask, “Is there anything else you are working on?” Be consistent and persistent in asking for work remaining. Don’t argue about it. Accept whatever they give you. Reality will show up eventually.(3) For each main chain of tasks (the Critical Path) and each feeding chain, compare the planned (base) finish with the current expected finish. The status (days ahead or behind) relative to the plan indicates how it is doing. This same calculation is done for Critical Chain’s buffer management and is called buffer incursion (in days).(4) This information is used to manage the existing projects with their current due dates, without adding buffers to them, to create an unbuffered management report. The process is to prepare the existing projects by inserting a milestone at the end of the project, and between each feeding chain and the critical path. The milestone, being the last task in the chain, indicates the planned finish of the chain. As status is added, the expected finish of the current task pushes all successors to the future or pulls them earlier. Do NOT recalculate the critical path unless it makes a significant difference to the flow.(5) Compare the current expected finish date with the base milestone (planned) finish date. This becomes an unbuffered incursion and can be reported and/or plotted for each chain of the project. Unbuffered Management can be used for all the projects, including the Critical Chain project. This provides a way to compare the health of all of the projects and a gives a basis for assigning scarce resources. The Critical Chain project would also have a Critical Chain Fever Chart and Buffer Report.Unbuffered ManagementCreate a chart with % Complete on the X-axis and Days Ahead/Behind on the vertical axis. The chart will have characteristics like a fever chart. Place a zero line horizontally (exactly on schedule), and plot days behind above and days ahead below the line. Like the fever chart, it is a visual indicator that the projects are gaining or losing ground. The chart indicates how each the project is doing and its likelihood of completing on time. It has a virtual buffer. The buffer is really not there, but its usefulness is.Traditionally managed projects typically have significant safety in each task in a futile effort to get every task completed on time. Most project managers either believe they have little or no safety in their projects or they believe that their safety is a minimal requirement to maintaining their schedule. They have substantial experience to prove it. They know that time and Murphy are very fickle. By using unbuffered projects, they keep their original task estimates and project due date. By adjusting behaviors toward Critical Chain requirements, task safety is much less needed and will accumulate at the end of the project. All projects are likely to go faster than they were. Project Managers see real results on their existing projects and look like heroes.ConclusionCritical Chain Buffer Management provides focus for management attention to significantly improve project performance. Since it is extremely difficult to transition from a traditional project management system to CCMPM, a transition methodology providing tools similar to Critical Chain Buffer Management is a significant bridge for that gap. With prioritization and unbuffered management, attention is focused where needed. Then good behaviors and a Road Runner ethic are developed, with the focus on completing as soon as possible, rather than on meeting the due dates. All of the work takes advantage of unbuffered management and the whole system flows faster during the transition.This methodology is only for the transition to Critical Chain Multi-Project Management. It is not to eliminate buffers. It puts all of the projects on a level playing field until the transition is complete.What to do until Buffer Management kicks in? Be doing Unbuffered Management!Copyright Skip Reedy, 2002, 2011Reprint allowed with credit 

The Internet has an enormous impact on how people communicate, shop, and work. This technology has also created changes in how companies conduct business in the 21st century. One of the areas of business that is likely to see tremendous change in the coming years is supply-chain management. By harnessing the power of the Internet, supply-chain management will continue to evolve in ways that will enable enterprises to change the way they manage inventory, place orders with suppliers, and communicate critical information with each other.While some of these technologies have existed for years, or decades in the case of radio frequency identification tags, the harnessing of the Internet to these technologies offers the potential for transforming supply-chain management. Improved supply-chain management also means improved inventory control and increased profits.In 2001, Nike missed its revenue target by a significant dollar amount. The shortfall was explained in part by a failed supply-chain automation project. “Some estimate that new technologies could strip out more than $30 billion in excess inventories” (Fonstad). The term e-business – as distinct from e-commerce – can be used to describe the adoption of the Internet to accelerate the goal of supply-chain integration (Lee) Four emerging technologies and practices in e-business will have a dramatic impact on supply-chain management.o Virtual marketplaceso Radio frequency identification tags (RFID)o Synchronized planningo Supplier performance managementVIRTUAL MARKET PLACESMetalJunction is the virtual marketplace owned by two of India’s largest steel producers. Tata Steel and Sail Steel traded more than 5,000 tons of steel in March 2002. By March 2003, tonnage had increased to 43,000 tons per month (Mills).What is a virtual marketplace and what are its applications to industry? Virtual marketplaces have many names such as e-markets, net market places, and electronic markets. These markets all have common characteristics.o Reliance on the Interneto Buyers and Sellers come together without an intermediaryo Neutrality (all buyers and sellers are treated the same)o Information is provided about sellers and productsIn its most fundamental form, a virtual market place brings together buyers and sellers through the internet. At its highest level, a virtual market place gives a purchaser and supplier the opportunity to re-engineer the sales administration process, improve forecasting and scheduling, renew its go-to-market approach, shorten its order-to-cash cycle, and enhance customer service (Steel24-7). Ideally, virtual market places are centered on a particular industry. Some prominent examples are steel, agricultural products, and automotive parts. In addition to providing information on vendors and general information about its products, a virtual market may also offer product specifications, side-by-side comparisons, technical papers, and market analysis.Many challenges exist in setting up an e-marketplace. Primary among these are identifying the tools necessary to use the market, providing a secure environment, pricing, payment, and fulfillment. For an orderly marketplace, Internet protocols must be selected. The cost of the technology to access and engage in the market must not be prohibitive. Security and privacy must be adequate to ensure confidential transactions. Authentication and authorization of users from many organizations must be possible. Private communication must be assured.Pricing policies may be set or bartered. A common example of bartering, or auctioning, is E-Bay for consumer products. Payment procedures can be predetermined or arranged between the buyer and the seller. Finally, fulfillment of orders must be insured. As in the case of traditional marketplaces, failure to deliver in a timely manner will result in firms losing market power and ultimately may lead to failure (McKnight).A final issue of concern in virtual markets is jurisdiction and governing law. Virtual markets place its members in the global trading community. Since e-markets are a recent phenomenon, defining the legal system responsible for settling disputes is an evolving process. Current legal reasoning places jurisdiction in the locality of the market. In a virtual market, however, one must ask where the market actually exists. While the FTC has attempted to exert control over on-line transactions, a definitive ruling on the jurisdiction for international e-market places has not yet been made.RADIO FREQUENCY IDENTIFICATION TAGSIn November 2003, Wal-Mart gathered together its 120 top suppliers to announce it would require radio frequency identification tags (RFID) on shipping pallets and cases of merchandise. Wal-Mart set a deadline of January 2005 for its top 100 suppliers. The remaining suppliers will had until the start of 2006 to meet the requirement (Sliwa).A basic RFID system has three components.o Antennao Transceivero Transponder (tag)The antenna activates the tag, reads, and writes data to it. When an RFID tag moves past a reader, its information is transmitted to a host computer for processing. Most common RFID systems are passive and contain their own power source, have a short transmitting range, operate at a low frequency, and have a low cost. While RFID has existed since the 1960′s recent technological changes have reduced the cost and allowed the technology to be used in more applications.A common everyday use of RFID is the automatic reading of prepaid passes on toll roads. The advantages of RFID are many fold. For example, RFID is extremely fast, non-contact, does not require line of site, and can operate in a variety of weather conditions. In the case mentioned above, the benefits of RFID will go to Wal-Mart, while the costs are the responsibility of the suppliers. Kara Romanov, an analyst with AMR Research, Inc., estimates the start-up costs for a supplier who ships 50 million containers per year will run between $13 million and $23 million. These costs include RFID tags and associated hardware and software (Sliwa).SamSys Technologies of Richmond Hills, ON and ThingMagic, LLC of Cambridge, MA are two leaders in the application of RFID to supply-chain management. Sam-Sys is dedicated to an open system environment that will not limit RFID to a single protocol or range of frequencies. This philosophy is based on the premise of many vendors and readers that will work seamlessly together (SamSys).ThingMagic was founded in 2000 by five MIT graduates. It has developed low cost RFID systems. Presently, ThingMagic is developing and marketing protocol agile RFID tag readers (ThingMagic). In addition to Wal-Mart, the Department of Defense (DOD) is a key player in RFID development and deployment. The Department of Defense has issued a new policy, which requires all suppliers embed passive RFID chips in each individual product if possible, or otherwise at the level of cases or pallets by January 2005. In February 2004, the DOD hosted a summit for its suppliers to discuss its RFID plans (Broersma). To quote Colin Cobain the Chief Technology Officer of Tesco Stores: “The question is not will RFID change the way you do business. The question is will you be ready” (ThingMagic).SYNCHRONIZED PLANNING ACROSS THE SUPPLY-CHAIN”Synchronized planning, in the form of collaborative forecasting and replenishment, coordinated production, inventory and capacity plans, information integration, and direct linkages of ERP systems, is one of the most exciting developments in supply chain management in many industries” (Synchronous). Synchronized Planning involves key steps (Lee).o Information integrationo Planning synchronizationo Workflow coordinationo New business modelsFirst, information integration requires information sharing and transparency. It is the sharing of information among the members of the supply chain. Information exchanged may include inventory levels, production schedules, and shipment schedules. The benefits include better job scheduling and a reduction of the bullwhip effect. “The effect indicates a lack of synchronization among supply chain members. Even a slight change in consumer sales ripples backward in the form of magnified oscillations upstream, resembling the result of a flick of a bullwhip handle” (Chase 335).Planning synchronization defines what is to be done with the information that is shared. This can include collaborative planning and joint design. The benefits are lower cost and improved service.If planning synchronization is the “what” is to be done with shared information, workflow coordination is the “how” it is done. Operations that can be coordinated include procurement, engineering and design changes, and production planning. Benefits include early time to market, improved service, and gains in efficiency. Synchronized planning can lead to new business models. Not only can these new business models redefine workflow, they can lead to changes in responsibility for different parts of the supply-chain. A redefined supply-chain can jointly create new products and lead to expansion into new markets (Lee).Synchronized planning, however, cannot be accomplished without a tight linkage of all companies in the supply chain. Channels of communication must be well defined and the performance of each member in the chain must be monitored. The integrated supply-chain must hold members responsible for their part in the process. As product life cycles grow shorter and shorter, efficient synchronization of the supply-chain grows in importance. To ensure that the supply-chain is driven by consumer demand, and to decrease the bullwhip effect, synchronized planning is critical (Lee).SUPPLIER PERFORMANCE MANAGEMENTAs the supply-chains of different organizations become tightly intertwined, it becomes necessary to measure the performance of each member of the chain. Former Federal Reserve Chairman Alan Greenspan testified before Congress in February 2001 that businesses were unable to anticipate the economic slowdown of the last recession, overbuilding inventories despite significant supply-chain automation (Fonstad). Even the use of the latest technology, therefore, may not guarantee that a supply-chain is operating efficiently.One way to answer the question of how well a supply-chain is functioning is to develop supplier scorecards. There are five steps in developing an effective scorecard (Golovin).o Agree on what is important and how to measure ito Use web based incident reports to communicate problems as they occuro Engage in continuous supplier managemento Measure to prevent rather than reacto Use web based software that all suppliers can utilize without making expensive investments in software and trainingIt is important that the buyer and seller agree at the outset on what is important and how it is measured. This is critical because once decided upon, the supplier will optimize its work to the designated criteria. If just in time delivery is a priority, the supplier may concentrate on this aspect of the order to the detriment of other factors. In addition, benchmarks to measure supplier performance must be realistic and attainable.Actual performance should then be consistently tracked against these benchmarks. The manufacturer and supplier should work together to develop benchmarks that are consistent with industry performance and product specifications. The use of web based incident reports is important in keeping track of problems as they occur. Incident reports should not be used only to track problems, but should be used to resolve the problem in real time. It is also important to measure the time it takes the supplier to correct the problem.Continuous supplier management, sometimes referred to as supplier engineering, has become more important as manufacturers outsource more of their operations. A 90-day review cycle can be ruinous when you are manufacturing an innovative product. “Innovative products typically have a life cycle of just a few months” (Chase 337). A 90-day review cycle may come close to exceeding the competitive advantage of an innovative product. Effective continuous supplier management must be geared to specific periods and tolerances. This is then tied to web based incident reports that enable alarms to ring when products, or delivery, are out of agreed upon tolerances.An effective supplier scorecard should be set up to prevent problems as opposed to reacting to them. The sooner you know there is a problem the lower the cost of resolving it and the greater the chance of preventing it altogether. The best scorecard not only measures events after they have happened, they continually monitor performance in real time. The use of automation is key to making this happen. For example, a system that matches invoices with purchase orders will catch pricing errors before a check is cut and a manufacturer’s money is out the door. Utilizing web-based software not only decreases the cost of a supplier integrating with a manufacturer, it speeds up the integration process. Web-based software also enables suppliers both small and large to participate in the supply-chain.The other four points listed above all rely on the ability of a manufacturer and a supplier to participate in the planning, sourcing, quality control, and delivery of a product. The Internet enables all members of the supply-chain to collaborate and work together as a team. Finally, by making supplier performance web-based, suppliers are able to participate in their own performance improvement (Golovin).CONCLUSIONSupply-chain management is an interesting and complex subject. It goes to the core of new business methods in the 21st century. The near universal availability of the Internet is the enabling technology for changes in how the supply-chain of an enterprise is managed. The Internet also allows organizations to adopt new business practices and enter new markets. By harnessing the power of the Internet, supply-chain management will continue to evolve beyond the changes being implemented today.E-business has been the logical outgrowth of e-commerce. E-business adopts the power of the Internet to accelerate the growth of supply-chain integration. While E-business has had a tremendous impact on supply-chain management, it also can be adapted to both front end and back end business operations (Lee). Improved inventory control and increased profits are two of the benefits of improved supply-chain management. As noted in the introduction, Nike missed its 2001 earnings targets due in part to the failed implementation of a supply-chain automation project. It has also been estimated that more than $30 billion dollars in excess inventories can be eliminated through improved supply-chain management. These real savings can be brought straight to the bottom line.Four new technologies and business practices that harness the power of the Internet are virtual market places, radio frequency identification tags, synchronized planning (RFID), and supplier performance management. Virtual markets enable buyers and sellers to come together 24/7 in effect creating a store that never closes. The additional advantages of virtual marketplaces are the elimination of an intermediary, access to product and vendor information, and a neutral market where all buyers and sellers are treated equally. Virtual markets give both buyers and sellers the opportunity to re-engineer their sales administration process.As noted above, RFID has existed since the 1960′s, however, improvements in technology and paring RFID with the Internet has expanded this tracking method beyond its limited past in manufacturing plants. The three components of an RFID system are an antenna, transceiver, and a transponder (tag).Synchronized planning when applied across a supply chain consists of collaborative forecasting and replenishment, coordinated production, inventory and capacity planning, information integration, and direct linkage of ERP systems. The four key steps in synchronized planning are information integration, planning synchronization, workflow coordination, and the opportunity to develop new business models. Key to synchronized planning is using the Internet for information sharing. The benefits of synchronized planning include better job scheduling and reduction of the bullwhip affect. The bullwhip affect magnifies oscillations upstream in the supply-chain caused by a change in consumer sales. Synchronized planning also defines what is to be done with shared information and how it will be done. As product life cycles grow shorter, efficient synchronization of the supply-chain rewards firms who seize its potential.Supplier scorecards are a method of evaluating members of the supply-chain in increasingly intertwined organizations. As Alan Greenspan pointed out in 2001, many firms were unable to anticipate the last recession and continued overbuilding inventory despite having invested heavily in supply-chain automation. This statement underscores the need develop the tools to monitor the performance of firms up and down the supply-chain. The five steps to develop an effective scorecard are agreeing on what is important and how it will be measured, the use of web-based incident reports, engagement in continuous supplier management, measuring to prevent problems, and the use of web-based software. In rolling out these tools, it is imperative that both the buyer and the seller first agree on what is important and how it will be measured. The other steps flow from the first.The Internet has had an enormous impact on the personal and professional lives of businesspersons. On the business side, the Internet has brought new life to existing technologies and offered businesses the opportunity to engage in the world marketplace. The harnessing of the Internet by business has enabled greater cooperation and information exchange up and down the supply-chain. The Internet has enabled businesses to improve the supply-chain by the way they manage inventory, place orders, and communicate critical information with each other.Works CitedBroersma, Matthew. “Defense Department Drafts RFID Policy.” CNET News. 24 Oct 2003. 5 Dec. 2003.Chase, Richard B., Nicholas J. Aquilano, and F. Robert Jacobs. Operations Management for Competitive Advantage. 9th Ed. New York: McGraw-Hill/Irwin, 2001.Fonstad, Jennifer. “From the Ground Floor: How to Manage Inventory on Demand.” Red Herring. 31 May 2001. 5 Dec 2003.Golovin, Jonathan. “Five Keys to a Successful Supplier Scorecard.” Vigilance, Inc. 5 Dec 2003.Lee, Hau L., and Seungjin Whang. “E-Business and Supply Chain Integration.” Stanford Global Supply Chain Management Forum. Nov 2001. 22 Nov 2003.McKnight, Lee W., Diana Anius, and Ozlem Uzuner. Virtual Markets in Wireless Grids: Peering Policy Obstacles. TPRC 30th Research Conference on Communication, Information, and Internet Policy., Oct 2002. Vienna, VA: Telecommunications Policy Research Conference.”Mills Warm to Online.” Steel Business Briefing. 1 Jul 03. 22 Nov 2003. SamSys. 4 Dec 2003.Sliwa, Carol. “Wal-Mart Suppliers Shoulder Burden of Daunting RFID Effort.” Computerworld. 10 Nov 2003: 1+. Steel24-7. 22 Nov 2003.”Synchronous Planning Across the Supply Chain.” Stanford Global Supply Chain Management Forum. 27 Jan 1999. 22 Nov 2003.ThingMagic. 4 Dec 2003.

Now that Green Supply Chains have established themselves as the predominant means of achieving action towards sustainability, there is intense focus on how the progress towards sustainability is measured and reported. Why is this important? It is a common refrain that what you cannot measure, you cannot manage. For most part we agree with it. Of course there are some intangible bits such as team spirit or supply chain collaboration which are difficult to measure objectively and directly. Indirect or subjective measures can quite quickly degenerate into pure exercise of bureaucratic nonsense. And, we all have seen instances of that. However, if the measurement methodology is developed, deployed and used properly there is no reason that both objective and subjective measures can form a great building block of green supply chains. Better still, companies can save money and improve productivity, the essential area in a competitive environment.There is a school of thought that puts performance reporting at the centre-piece of the entire action. The reasoning is simple – if you start measuring and reporting, slowly you will start seeing action towards improvement. While there is some soundness in this logic, we caution against a cookie-cutter approach to measurement and reporting – which is often deployed in such cases. Putting technology before information in this manner is akin to putting a cart before the horse.From an organizational perspective, it is crucial to understand processes to an exceptional level prior to engagement of deploying technology to help the business. Too often the technology leads the process leading to poor utilization of the resource at hand, a poor fit to the company business and in terms of information, “Rubbish in – Rubbish out”.Good supply chain technology is inherently linked to clearly defined processes, and through this, excellent improvements in performance ensue,In this article we will discuss how to create, deploy, use, present information and use the output of a good green supply chain performance evaluation methodology. Before we do that, let us briefly examine the benefits of such a methodology to understand in more details why it is important.Benefits of Performance EvaluationA consensus view of the situationWhile all the parties will have their own view on the current ‘greenness’ at any point of time and how the green supply chain project is progressing, only a comprehensive performance evaluation methodology can achieve a consensus view of the situation prevailing at any point of time. There might be minor quibbles with the measurement methodology, timing etc. but in general most parties will agree with most of the findings. International standards of measurement are also helping to improve consensus in areas such as green supply chain practices. This provides them with a common platform to build their further discussions on – whether they are for allocation of resources, for discontinuing some projects or re-enforcing some others, or for incentives alignment. This common platform is extremely important to achieve in order to have an informed discussion within an organisation, as well as, with the supply chain partners outside the organisation.Gauge progressBy their very nature all change programs are times of high turbulence, and it is very difficult to measure progress without any a comprehensive methodology to do so. A well designed green supply chain performance evaluation system should allow the organisations to gauge their progress against peers, against their own goals, as well as against their performance at the beginning. This provides a clear picture of how effective the efforts have been and highlights the areas where they have not been very effective. It also allows organizations to track their performance against competition or alongside legislatory changes.Focus Resources where they maximise impactAligned with gauging progress is the ability to focus the resources on those areas where they can maximise the impact to achieve the overall goals of the organisation. This type of periodic adjustment is necessary in order to optimise the use of resources and results from them.Incentives managementSupply chain partners as well as the key team members must be completely on board through incentives alignment. In the absence of such buy-in the green supply chain change program risks not achieving their full potential. A robust performance evaluation methodology is necessary in order to agree on incentives and in order to distribute them in an objective manner.External Reporting and Green MarketingIt has now become a statutory requirement or a recommendation in many jurisdictions now to report the progress on environmental efforts of the organization. For obvious reasons these reports must be well documented, substantiated and based on a robust measurement methodology. While marketing efforts without sufficient evidence to support to claim will attract charges of green-washing or misleading advertisement, false reporting carries heavy penalties in many jurisdictions. Clearly, then for both external reporting and for green marketing, it is fundamental that all reports, claims, advertising, marketing messages are based on data measured through robust methodologies.Objective Audit TrailFinally, all change management programs need an objective trail of data which is clearly auditable in order to justify the actions and responses taken at any point in time.Certain companies in the shipping industry use leading verification parties such as the Global Reporting Initiative (GRI) to verify sustainability reporting and avoid greenwashing.High profile industries and organizations alike, can no longer afford to internally measure their standards of environmental capabilities without ensuring there are alliances with verification parties that can measure and audit the process and findings. Again, to truly show the worth of the green supply chain system, the audit trail should be aligned to continual improvement with a recognized certification such as ISO 14001 or associated equivalents,A robust performance evaluation system should be able to provide such an auditable information repository for post-hoc use.Performance Evaluation MethodologyEach green supply chain program is unique – just as each supply chain is unique. While there will be a number of common elements across a multitude of supply chains, the differences will make it necessary to create and adopt a purpose build performance evaluation methodology for each green supply chain program. Three key questions need to be answered in order to do so:What to measure?Most people equate green supply chain measurement with carbon emissions measurement. While this is a big part of overall green supply chain drive, there are other, equally important, issues that form the complete picture. As discussed throughout the book GREEN SUPPLY CHAINS – AN ACTION MANIFESTO, transition towards green supply chain involves movement along several core elements:

Green supply chain planning
Green procurement
Green supply chain execution
Carbon management
Green supply chain migration
Green supply chain continuous improvement
Supplier “Eco” Rating programmes
In each one of these core elements of green supply chains there will be multiple sub-elements that will need to be measured. These sub-elements will change over time as the program progresses towards conclusion.The first job of the measurement team will be to establish the key sub-elements which will be measured as part of the performance evaluation program. How will they do that? By studying the key processes that form each element and establishing parameters for measurement of these processes. For example – Green Procurement involves collaboration. A measurement of collaboration is “% of green supply teams which comprise members from two or more organisations across the entire supply chain”. Another measure of collaboration is “time spent co-developing ideas for sustainable sourcing program”. It is imperative to point out that the task is to create a set of meaningful measurements that are relevant, mutually exclusive and collectively exhaustive. At the same time they must be unambiguous, objective and easy enough to measure and report.Another thing we must point out at this stage is that some measurements are input oriented – e.g. the two measurements given above are both input oriented, while others – such as “carbon dioxide produced in the entire supply chain of the product (in kg)” – are clearly output oriented. Both are essential for efficient management of green supply chain programs. Input oriented measurements denote whether we are doing the right things in the right order; while output oriented measurements denote whether we are getting the right results. In other words, input oriented measurements denote whether we are using the right ingredients as per the recipe, while the output oriented measurements denote whether the final dish meets the expectations or not.Finally, it should be noted at a robust measurement program should be able to stand up to scrutiny at any point in time. It takes time, effort and imagination to create a custom tailored measurement program. Short-cut will only lead to frustrated teams who are directed to do run a marathon and then measured in 100m time-slots. That is the reason, we are not big fans of commercially available pre-packaged measurement programs. Green sustainability is too broad to be adopted as off the shelf solutions.. While, in theory they could be adapted to do the job, we find that in reality, it is far easier to start from the scratch and create an imaginative and robust measurement program. Ideally a technology partner should also understand your business requirements and tailor the solution in line with the needs of your firm. This needs to be the case as sustainability is in itself an integral part of the company’s business process if it is to be successful. As such, the integration needs thorough assessment prior to implementation to achieve a successful outcome in improving company performance. Sustainability has to be treated with equal importance to any other business process if it is to achieve the most productive outcome.